hoa turnover in virginia

what is the procedure in virginia for the developer to turnover the hoa? The developer should have turned over te hoa 2 years ago but to date it has not done so. The developer has the controlling amount of votes on the Board but they do not have the majority of the property any longer. How should we proceed?

Vida,

You will need to see what your governing documents say. In Virginia the Property Owners Association Act allows developers to retain control of the HOA until the last property is sold.

This was the case for our HOA here in Virginia. The developer chose to retain control for the full period allowed by the law. We originally expected turnover to occur in 2007 but when the housing market crashed the last home was not sold until 2009. Our first homeowner board was elected last May and they are still struggling to correct the massive mismanagement that went on under developer control. We issued as demand letter to the developer nearly a year ago, listing all of the defects identified by a professional engineer we hired. There have been several meetings between the developer and the board but so far nothing has been fixed nor has the developer committed to fix anything.

It is really unfortunate that the law in Va. gives all the power to the developer. Also, don't expect any real help from the Common Interest Community Board Ombudsman's office created in 2009. They serve mostly as political cover for the interests of developers and association management companies.

There is no substitute for an involved, vocal membership. Get your local politician involved in any issues. Good luck.

Hi Vida:
I have not found any statute that states what David mentioned above. The following statutes put time limits and quantity of units on the declarant before they must turn over control. You unfortunately have some declarants who are control freaks. This is one of the reasons I like a statute Minnesota enacted Aug 2010 where quorum at time of turnover is present whether developer is physically present or not. They must have had similar problems as yours and the state has now given developers an attitude adjustment.

Under the Virginia State Statutes regarding Property I found the following:

Condominium:
§ 55-79.74. Control of condominium by declarant.
A. …… The time limit initially set by the condominium instruments shall not exceed five years in the case of an expandable condominium, three years in the case of a condominium (other than an expandable condominium) containing any convertible land, or two years in the case of any other condominium. Such time period shall commence upon settlement of the first unit to be sold in any portion of the condominium.
Other areas in this section will pertain to documentation to be turned over to homeowners.

Homeowner Association:
§ 55-509.2. Documents to be provided by declarant upon transfer of control.
Unless previously provided to the board of directors of the association, once the majority of the members of the board of directors are owners of improved lots in the association and the declarant no longer holds a majority of the votes in the association, the declarant shall provide to the board of directors or its designated agent the following: (i) all association books and records held by or controlled by the declarant, including without limitation, minute books and rules and regulations and all amendments thereto which may have been promulgated; (ii) a statement of receipts and expenditures from the date of the recording of the association documents to the end of the regular accounting period immediately succeeding the first election of the board of directors by the home owners, not to exceed sixty days after the date of the election, such statement being prepared in an accurate and complete manner, utilizing the accrual method of accounting; (iii) a copy of the latest available approved plans and specifications for all improvements in the project or as-built plans if available; (iv) all association insurance policies which are currently in force; (v) written unexpired warranties of the contractors, subcontractors, suppliers, and manufacturers, if any, relative to all common area improvements; (vi) any contracts in which the association is a contracting party; and (vii) a list of manufacturers of paints, roofing materials and other similar materials if specified for use on the association property.

If the association is managed by a common interest community manager in which the declarant, or its principals, have no pecuniary interest or management role, then such common interest community manager shall have the responsibility to provide the documents and information required by clauses (i), (ii), (iv), and (vi).

Actually David … your developer could not have done what he did legally regarding the covenants. You will have developers who 1) have an idiot for an attorney or no attorney and try to put items not actually legal in Covenants, or 2) put items in the covenants because many individuals do not know the law, so they get away with others thinking it is actually the truth. Note below what I have bolded for your information from Virginia statutes:

§ 55-460. Executive board members and officers.
D. Subject to subsection E, the declaration may provide for a period of declarant control of the association, during which period a declarant, or persons designated by him, may appoint and remove the officers and members of the executive board. Regardless of the period provided in the declaration, a period of declarant control terminates no later than the earlier of: (i) 60 days after conveyance of 75 percent of the cooperative interests which may be created to proprietary lessees other than a declarant; (ii) two years after all declarants have ceased to offer cooperative interests for sale in the ordinary course of business; or (iii) two years after any development right to add new units was last exercised. A declarant may voluntarily surrender the right to appoint and remove officers and members of the executive board before termination of that period, but in that event he may require, for the duration of the period of declarant control, that specified actions of the association or executive board, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective.

E. Not later than 60 days after conveyance of 25 percent of the cooperative interests which may be created to proprietary lessees other than a declarant, at least one member and not less than 25 percent of the members of the executive board must be elected by proprietary lessees other than the declarant. Not later than 60 days after conveyance of 50 percent of the cooperative interests which may be created to proprietary lessees other than a declarant, not less than 33 1/3 percent of the members of the executive board must be elected by proprietary lessees other than the declarant.

Thank you. We are single family homes in vorthern virginia.

Hi David … you are right I did copy the wrong statute. As I noted in bold above in the POA statute it does state when declarant no longer holds a majority of the votes. However, Virginia statutes are ambiguous on this issue and really should be clarified.

Maybe this is something you could recommend to your state legislature officials.